Introduction to Management

UNIT 1
 Organization
A systematic arrangement of people
brought together to accomplish some
specific purpose; applies to all
organizations—for-profit as well as not-
for-profit organizations.
Where managers work (manage)
Common characteristics
Goals
Structure
People
 What Is Management?
• Management
– The process of achieving company goals effectively and
efficiently by engaging in the four major functions of
planning, organising, leading, and controlling of
company’s resources.
Resources include:
 Human resources e.g.
Planning
employees
 Financial resources e.g. bank
loan or investment from
Controlling Managem Organising
shareholders ent
 Physical resources e.g.
machinery, inventory
 Information resources e.g. Leading

knowledge 3
 Process of Management

Human
Resources

Financial
Resources
Manager Planning→ Organising→Leading→ Goals
Physical Controlling
Resources

Information
Resources

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 Historical Background of
Management
• Ancient Management
– Egypt (pyramids) and China (Great Wall)
• Adam Smith
– Published The Wealth of Nations in 1776
• Advocated the division of labor (job specialization) to
increase the productivity of workers
• Industrial Revolution
– Substituted machine power for human labor
– Created large organizations in need of
management
Managerial Levels – Vertical
Dimension

Top-management: e.g. Board

of Directors, CEO, President,
Vice President
Middle-management: e.g.
branch manager, department
head
First-line management: e.g.
supervisor, team leader

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 Top-management
• Managers at the level are ultimately
responsible for the following:
– Make long-term plans
– Establish policies
– Represent the company
• Referred to as executives of the company
• Oversees the overall planning for the
company
• Example: The Board of Directors of the
company sets a goal of increasing company
sales by 10% in the next year
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 Middle-management
• Managers at middle-level are responsible for
the following:
– Develop detailed plans and procedures to
implement goals
– Make decisions
– Direct first-level managers

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 First-line management
• First-line management is directly responsible
for the following:
– Implement plans
– Assist middle-level managers
– Oversee workers
– Oversee the day-to-day operations to ensure the
company is smoothly run

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Major Approaches to Management
 Major Approaches to Management

• Classical
• Quantitative
• Behavioral
• Contemporary
 Scientific Management
• Fredrick Winslow Taylor
– The “father” of scientific management
– Published Principles of Scientific Management (1911)
• The theory of scientific management
– Using scientific methods to define the “ONE BEST WAY” for a
job to be done:
» Putting the right person on the job with the correct tools and
equipment.
» Having a standardized method of doing the job.
» Providing an economic incentive to the worker.
 Taylor’s Scientific Management Principles

1. Develop a science for each element of an individual’s work, which will

replace the old rule-of-thumb method.
2. Scientifically select and then train, teach, and develop the worker.
3. Heartily cooperate with the workers so as to ensure that all work is done
in accordance with the principles of the science that has been developed.

4. Divide work and responsibility almost equally between management and

workers. Management takes over all work for which it is better fitted
than the workers.
• Frank and Lillian Gilbreth
– Focused on increasing worker productivity through
the reduction of wasted motion
– Developed the microchronometer to time worker
motions and optimize work performance
• How Do Today’s Managers Use Scientific
Management?
– Use time and motion studies to increase
productivity
– Hire the best qualified employees
– Design incentive systems based on output
 General Administrative Theory
• Henri Fayol
– Believed that the practice of management was
distinct from other organizational functions
– Developed principles of management that applied
to all organizational situations
• Max Weber
– Developed a theory of authority based on an ideal
type of organization (bureaucracy)
• Emphasized rationality, predictability, impersonality,
technical competence, and authoritarianism
 Fayol’s 14 Principles of Management

1. Division of work 7. Remuneration

2. Authority 8. Centralization

3. Discipline 9. Scalar chain

4. Unity of command 10. Order

5. Unity of direction 11. Equity

6. Subordination of 12. Stability of tenure of

individual interests to personnel
the general interest 13. Initiative
14. Esprit de corps
Weber’s Bureaucracy
 The Hawthorne Studies
•A series of productivity experiments conducted at
Western Electric from 1924 to 1932.

•Experimental findings
Productivity unexpectedly increased under imposed
adverse working conditions.
The effect of incentive plans was less than expected.

•Research conclusion
Social norms, group standards and attitudes more strongly
influence individual output and work behavior than do
monetary incentives.